Blue Diamond almond co-op has banner year, plans new facility

11/17/2011 02:41:00 PM
Vicky Boyd

Blue Diamond Growers is the nation's largest supplier of almond and value-added almond products to consumers and industrial users.

Now the Sacramento, Calif.-based grower cooperative wants to translate that know-how into leading the international market.

At its 101st annual meeting, Blue Diamond chairman Clinton Schick, a McFarland, Calif., almond grower, provided details of the cooperative's latest venture—a state-of-the-art food processing facility in Turlock.

The facility has been 15 years in the planning, he says.

The purchase of 88 acres in Turlock also marks the first large capital expenditure the co-op has made since building its Salida, Calif., processing plant in 1968.

Back then, the state's almond growers harvested a 140 million pound crop.

In 2010, they harvested 1.6 billion pounds shelled, and the U.S. Department of Agriculture estimates this year's crop will be 1.95 billion pounds shelled.

Although Blue Diamond doesn't comment on how many pounds it handles annually, the 3,000-member cooperative is by far the largest almond processor in California and the nation.

The first phase of the plant, comprising 200,000 square feet and one manufacturing line, is scheduled to open in May 2013, Schick says.

The total build-out will be 500,000 square feet.

The cooperative looked at several options and ultimately determined building a new facility, designed with food safety in mind, was the best course, Schick says.

"We considered lots of approaches," he says. "We thought about trying to cram more manufacturing capacity into existing facilities."

Schick says he expects grower-members will see only a half cent per pound decrease in their returns in the coming years to pay for the facility.

Once completed, it will produce value-added products such as Almond Breeze, an almond-based milk replacement beverage, and Nut Chips and Nut Thins, almond-based snacks.

The co-op has been recognized for its innovative products by the likes of Oprah Winfrey, Martha Stewart and the Wall Street Journal, says co-op chief executive officer Mark Jansen.

Blue Diamond has enjoyed double-digit growth in every major consumer segment it occupies in the United States whereas the categories themselves have grown by only 2 percent to 4 percent, he says.

Jansen says the co-op hopes to take its successful Almond Breeze products and introduce them to overseas markets.

Blue Diamond also supplies almond-based value-added ingredients to industrial users. When Jansen took the reins of Blue Diamond last year, he challenged employees to increase sales by 20 percent.

As he reported at the annual meeting, they didn't meet the goal—they exceeded it and hit 34 percent growth.

"The only thing that can slow this down is manufacturing capacity," he says.

The increased popularity of Blue Diamond's value-added products has translated into strong growers returns.

For the 2010 crop, members received a maximum of $2.20 per pound for Nonpareil inshell and $2.15 per pound, including quality premiums, for shelled Nonpareil, the most widely grown almond variety.

Growers of Buttes and Padres, pollinizer varieties, received a maximum of $1.58 per pound.

Despite a larger almond crop in 2010, Blue Diamond was able to obtain a higher return for its grower members than in 2009, when the average Nonpareil return was $2.01 per pound.

The 2009 crop was 1.4 billion pounds.

Jansen pointed to the increasing popularity of the co-op's consumer lines, the growth of value-added ingredients, increases in operating efficiency and $10 million in cost savings as a few reasons for the higher 2010 grower returns.



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